Norway’s central bank has announced the exclusion of two oil and gas companies from its $1.4 tn wealth fund, amid concerns linked to their potential ties with the Myanmar military.
The world’s largest sovereign wealth fund confirmed in a statement that it would exclude GAIL India and Korea Gas ‘due to unacceptable risk’ that both firms are involved in ‘serious violations of individual’s rights in situations of war or conflict.’
More specifically, the statement reads: ‘The background is the companies' business collaboration with an organization affiliated with the military in Myanmar.’
Fulfilling exclusion criteria
On matters of exclusion from the fund’s investment universe, or to place businesses on an observation list the Norwegian central bank refers to recommendations from the Council on Ethics, which is appointed by the Ministry of Finance.
However, in this case, Norges confirmed its executive board did not carry out an independent assessment of all the recommendations from the council but is anyways ‘satisfied’ that the guidelines for observations and exclusion have been fulfilled by both companies.
It’s worth noting that according to the fund’s filings, as of December 2022, the fund held nearly $70.2 mn worth of shares in GAIL and more than $5.5 mn in Korea Gas.
GAIL has been approached for comment. Korea Gas could not be reached at the time of writing.